It's become increasingly clear in recent weeks that Facebook is finally inching toward the launch of a micropayment platform. The social site has been expanding the presence of its virtual currency, which Facebook debuted last November when it changed the monetary units for its "Gifts" product into "credits" rather than U.S. dollars.
Credits are now bundled with some promotional items in the Gifts app. And soon, select developers on the Facebook Platform will be able to start working "credits" into their own applications, in a move that could lead to a lucrative new revenue stream for Facebook, which currently relies on an advertising-based business model.
First reported by a number of tech blogs, the company has confirmed this development.
There's been talk of Facebook's planned foray into the e-commerce sector for well over a year now. But the "credits" product that's being released to developers soon appears to be quite different from the Facebook payment platform that followers of the company have anticipated.
As recently as last fall, Facebook's plans -- reportedly called "Facebook Wallet" -- were something much more like a straight-up, PayPal-like transaction platform.
At least initially, that's likely not the case.
Facebook's official comment on whether this is a shift in company strategy is coy."We think enabling developers to accept these credits as a form of payment has the potential to create exciting new use cases for users and developers," spokesman David Swain said in an e-mail. "We do not have details to share at the moment because this will be a very small alpha, only a handful of developers, but will likely share more as we evaluate the results of the test."
Swain declined to comment on whether Facebook would ever pursue a more standard e-commerce product like what many had assumed the "wallet" would be.
But sources with knowledge of Facebook's product development say that what started as the "wallet" eventually turned into the "credits" system.
According to one well-placed source in the virtual-currency sector, there's been a clear change from Facebook's earlier plans to foray into the transaction and payment space.
"It's an absolute change in strategy," the source said. "So, they're not competing with PayPal now."
Virtual currencies, with silly, often casino-inspired names and an unfortunate reputation in the mainstream as the way to buy enchanted swords and potions in fantasy role-playing games or to bling out your virtual penguin, don't carry the serious-business gravitas of services such as PayPal.
But shifting strategy to a virtual goods platform is a savvy and forward-thinking move on Facebook's part. Since it launched two years ago, Facebook's developer platform has changed and matured a lot.
Most notably, a few app development companies are making an astonishing amount of money without paying Facebook a cent -- and most of these are on the games and entertainment side of things... [Read More]
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